Friday, December 13, 2013

Living Wage

Traditionally, the living wage argument starts and ends with the employer, will he, or won't he, pay enough for a person to live a dignified life on that wage? This strikes me as a bit strange because the chain of events leading up to that point matters tremendously. If the market clearing rate is above the living wage rate, the employer will tend to do so almost all of the time. He hurts his own self interest if he does not.

So who sets the market clearing rate on a particular job? It's a combination of the both supply of demand just like every other free market transaction. So why is the only moral agent on the demand side? Why does there never seem to be discussion on what happens on the supply side.

Mike Rowe, the protagonist of Dirty Jobs has noticed that a lot of these jobs pay very well and are actually in shortage. Salaries are good and there are a lot of open positions that go unfilled. He's actually created a foundation to promote these dirty jobs and a culture that values them because right now the problem of the living wage is exacerbated by a social stigma to getting your hands dirty and learning a trade. This social stigma not only causes those unfilled positions but also has follow on effects. The welding company that is short 10 welders can't take on certain work that goes elsewhere, often outside the country and jobs that do not require those specialized skills exit right along with that work.

So the guidance counselors that steer kids away from the trades, the school boards that killed off vocational training, the chattering class that devalues blue collar work, all of that is part of the living wage discussion but nobody is raising these issues so far as I can tell.

It leaves me with one great puzzle. Why?